Apple is borrowing $1 billion to fight climate change

Apple CEO Tim Cook in front of a picture of Apple Park, which Apple calls "the greenest corporate headquarters on the planet."
Getty

Apple issued a $1 billion bond on Tuesday with special rules: the proceeds it raises must be used on eco-friendly projects.

The proceeds from the bonds will be used for several projects, including new and ongoing solar and wind farms, new green buildings, and a program that seeks to make Apple products using only recycled or renewable materials.

This is the second so-called "green bond" that Apple has issued. Last year, Apple raised $1.5 billion in a green bond sale. Apple is now the largest issuer of dollar-denominated green bonds.

According to the bond prospectus, Apple has issued $99 billion in debt. It had $256.8 billion in cash at through its second quarter of 2017.

Big in bonds

Green bonds are intended to make it easier for investors to identify environmentally-friendly projects, and the proceeds will follow a set of guidelines called the Green Bond Principles.

Projects funded from the the bond proceeds will be approved by Lisa Jackson, Apple's VP of Environment, Policy, and Social Initiatives.

Currently, 96% of Apple's electricity comes from renewable sources, and Apple has invested in solar farms and hydroelectric plants around the world.

The bond offering also has a specific focus on Apple's stated goal of a "closed-loop supply chain," which means that Apple is seeking to make products using only renewable or recycled materials.

"This means Apple will be investigating ways to build products using only renewable resources or recycled materials, and will be pursuing ways to better recover and recycle materials from its products," according to a oversight document from Sustainalytics commissioned by Apple.

Apple's green bond is the first US green bond issued since President Trump announced he intended to withdraw the US from the Paris accords.

Green bonds are just a small proportion of Apple's borrowing strategy. Apple issues debt so it doesn't have to use offshore cash to spend on these projects, which would mean that Apple would pay taxes on those reserves.